(S,P) The recent change in Rules of Origin means more goods with EU content can benefit from zero duty into the UK argues Arne Mielken of Customs Manager Ltd
UK Turkey FTA
The UK and Turkey have locked in tariff-free trading arrangements and committed to working towards a more ambitious trade agreement in the future.
When the UK was an EU Member State, its trading relationship with Turkey was governed by the EU-Turkey Customs Union, alongside an agreement on agriculture and the coal and steel agreement. This arrangement has been transitioned into a traditional free trade agreement.
The deal will secure existing preferential tariffs ensuring the continued tariff-free flow of goods and protecting vital UK-Turkey supply chains in the automotive and manufacturing sectors.
It also ensures UK businesses can continue to import under preferential tariffs, compared with no agreement. This supports UK importers of textiles, where the annual increase in estimated duties would have been around £102m under WTO terms. Tariffs applied to UK imports of washing machines and televisions will remain at 0%, compared to up to 2% and 14% respectively under WTO terms.
Vital UK-Turkey supply chains will also be protected for automotive manufacturers.
What this agreement includes
trade in goods – including provisions on preferential tariffs, tariff rate quotas, rules of origin and sanitary and phytosanitary measures
customs and trade facilitation
technical barriers to trade
Tariff rates on goods
Preferential tariff rates for bilateral trade in goods between the UK and Turkey will continue to apply as soon as the agreement takes effect. In some cases, the non-preferential applied rates for imports into the UK may in fact be lower because of changes in the UK’s Most Favoured Nation tariff schedule.
However, as set out in the agreement, exporters will need to prove origin via self-certification in order to benefit from these preferential rates, for example, the good must be originating in one of the parties.
Rules of Origin
the Rules of Origin Protocol in the agreement includes a number of temporary provisions – listed in a Joint Declaration, and including the Product Specific Rules – that will be shortly updated in line with the General Provisions and Product Specific Rules set out in the Trade and Cooperation Agreement between the UK and the EU.
This does not include the administrative provisions or cumulation arrangements.
This guidance will be updated when the RoO Protocol is updated to align with the Trade and Cooperation Agreement.
Proof of origin
To benefit from preferential tariffs when importing into the UK from Turkey, or into Turkey from the UK, the importer will be required to declare they hold proof that the goods comply with the rules of origin.
Entitlement to preference is based on a declaration on the origin that the product is originating made out by the exporter. This can be in electronic format.
Declaration on origin
The declaration on origin must use the following wording:
The exporter of the products covered by this document (customs authorisation No … (1)) declares that, except where otherwise clearly indicated, these products are of … (2) preferential origin.
(Place and date)
(Signature of the exporter, in addition the name of the person signing the declaration has to be indicated in clear script)
For exporters located in Turkey, when the origin declaration is made out by an approved exporter, the authorisation number of the approved exporter must be entered in this space. When the origin declaration is not made out by an approved exporter, the words in brackets shall be omitted or the space left blank. When the origin declaration is made out by an exporter located in the UK, the EORI number must be entered in this space.
Origin of products to be indicated
These may be omitted if the information is contained in the document itself
In cases where the exporter is not required to sign, the exemption of signature also implies the exemption of the name of the signatory.
When exporting to Turkey you must include your EORI-number in any declaration you issue to your Turkish customer, regardless of the value. When exporting to the UK, you must include the approved exporter number.
The declaration on origin must be provided on an invoice, or any other commercial document (excluding a Bill of Lading), describing the originating product in sufficient detail to enable its identification.
Declarations on origin will be valid for 24 months from the date it was made out for imports into the UK or 12 months for imports into Turkey.
As a transitional measure to cover goods in customs warehousing or temporary storage, or in transit on 31 December 2020, HMRC will accept ATR and EUR1 forms issued and dated on or before 31 December 2020 as proof of origin for a period of up to 12 months after 31 December 2020.
Business must also ensure the working or processing you do in Turkey or the UK goes beyond the minimal operations listed in the agreement and the other relevant conditions are met.
For example, you will not be able to simply package or label a product from the EU and export it to Turkey as a good originating in the UK.
See the list of minimal operations in Annex 2 of the Rules of Origin Protocol in the UK-Turkey agreement text.
Using EU materials and processing in your exports to Turkey or the UK
Businesses can continue to use EU materials or processing in their exports to Turkey or the UK.
The UK and Turkey must have fulfilled the necessary requirements set out in the Rules of Origin Protocol.
Using materials and/or processing from other countries in your exports to Turkey
If both the UK and Turkey have an agreement with one of the other countries listed in Annex 4 to the Rules of Origin Protocol, you can continue using materials, and in some cases, processing from that country in your exports to Turkey.
You must ensure that the working or processing you do in the UK goes beyond the minimal operations listed in the agreement and the other relevant conditions are fulfilled.
Sending your goods to Turkey through the EU and other countries
Goods transited through the EU – and any other country with whom cumulation is applicable – will not be subject to the same restrictions as those in transit through other third countries.
For example, you will be able to split a consignment in the EU when exporting goods to Turkey, provided the goods comprising the consignment have not cleared customs in the EU.
Transit through any other third country is possible provided your goods remain under customs surveillance and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition.
Guidance UK-Turkey FTA
Full Text including Rules of Origin
New Reports and commentary on 15.01.2021
Why the UK sees Turkey as a key ally
Commentary on the UK-Turkey Agreement
The double irony of the new UK-EU trade relationship
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